The 'Section 194N' of Income Tax Act deals with TDS on: MCQ with Answer and Explanation

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The 'Section 194N' of Income Tax Act deals with TDS on:

A. Rent

B. Professional fees

C. Commission

D. Cash withdrawals exceeding certain limits from bank accounts

Answer: Option D

Solution (By JKSSB Mock Tests)

TDS at 2% on cash withdrawals exceeding ₹1 crore (or ₹20 lakh for non-filers of returns).

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

The primary objective of 'Tax Audit' is:

A. To check compliance with income tax provisions

B. To assess corporate governance

C. To audit GST returns

D. To certify financial statements for banks

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Correct Answer: Option A

Explanation:
Tax audit under Section 44AB ensures compliance with income tax law and correct reporting of income.

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Question #2

In the context of single entry system, 'Net Worth' means:

A. Excess of assets over liabilities

B. Total assets

C. Cash in hand

D. Total liabilities

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Correct Answer: Option A

Explanation:
Net worth = Total assets - Total liabilities, representing owner's equity.

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Question #3

Which of the following is a variable cost?

A. Depreciation

B. Direct material cost

C. Rent of factory

D. Salary of manager

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Correct Answer: Option B

Explanation:
Direct material cost is a variable cost because it varies directly and proportionately with the level of production.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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